Since we have been using Sitefinity for a couple of years we actually have very little in the way of support requirements and when we do have a question that you answer, we can apply that knowledge or fix to all our clients, saving you time and money.
This is the reason to have a developer license, but I understand that when you have a developer license you don't get paid per domain, just per developer. Might I suggest that with your 4.x model you implement something in between your old and your new model that would work for people like us.
I'm thinking of some sort of a developer license that is a per-year fee (maybe similar to your old model of $1,250 to buy and half that to renew each year) and then a much reduced fee per license. That way you can keep your per top-level domain licensing but also not lose your shirt on the support.
Let's say that you offered 60% off each domain and support had to go through the developer then a developer would need to buy at least 3 domains before they were saving any money ( (1250+360+360+360)/3) = $777 per domain. This would, however, make your developers very happy, if they are looking to move more clients to your platform.
If a client wanted to move away and take their licence and no longer be under me as the developer, they would need to purchase the difference in the support & upgrades contract from you directly. Otherwise they would be on their own.
I have developed numerous sites with sitefinity. I mostly deal with small businesses with a small budget. My clients don't usually have more than 100 pages in the sites. I guess telerik isn't targeting this segment at all.
I have built several sitefinity standard for the clients who can afford it (and they have renewed for a couple of years already.), but there are also some small businesses and start-ups those cannot afford (or simply refuse) to pay more than $1,000 for a web project.
While I understand telerik is not a charity and sitefinity is better than the open source alternatives out there. I am not asking you to provide the product for free, but would you consider an "express" edition that is $199 and requires the display of telerik's / sitefinity's logo? Many clients do not actually mind the logo that much. You can keep the $499 small business edition for those companies who have slightly better budget. For the clients who used the standard edition, I guess they will have to settle with the small business edition--they simply won't agree to pay $2,000 for a new license. The renewal would probably cost more anyway.
With many good enough and free open source products out there, it is hard to recommend even the$499 small business edition, especially considering the restrictions it has. I wish I can tell them that they can't get a decent CMS with a $1,000 budget, but there are actually many solution providers who can deliver a decent product at that price.
Sitefinity has been the CMS of choice for me as a developer. The UI is much simpler to use than many alternatives and I like how I can leverage my asp.net c# skills to create additional, customized modules for my clients. I guess that means I will have to learn a few more open source products Drupal Joomla N2 Umbraco to stay competitive.